U.S. PIRG - Budgethttp://www.uspirg.org/topics/budget
enA Terrible, Horrible, No Good, Very Bad Ideahttp://www.uspirg.org/blogs/blog/usp/terrible-horrible-no-good-very-bad-idea
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<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden"><div class="field-items"><div class="field-item even"><span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2015-02-26T00:00:00-05:00">Thursday, February 26, 2015</span></div></div></div><div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/usp/jaimie-woo">Jaimie Woo</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p><img src="http://farm3.staticflickr.com/2568/4105756012_db89e4be50.jpg" alt="" /></p>
<p>You'd think that common sense and strong opposition would be enough to kill a bad policy.</p>
<p>Not in Washington, D.C., apparently.</p>
<p>A little more than a year ago, I <a href="http://www.huffingtonpost.com/jaimie-woo/infrastructure-bill-is-ac_b_3989024.html" target="_hplink">highlighted the absurdity of using a corporate tax holiday to fund infrastructure</a>. Here's a quick refresher: Currently, large wealthy corporations avoid taxes by making it look as though their U.S. profits are generated offshore - costing Americans $90 billion each year in tax revenue.</p>
<p>Yet, a strangely popular proposal would give companies a temporary tax holiday, letting corporations bring back their money on paper, or "repatriate" it at an extremely low tax rate, thereby encouraging more corporate tax dodging in the future. The most ridiculous part? Some Members of Congress want to use this tax break that costs money to "pay for" badly needed infrastructure investments. How does that even make sense?</p>
<p>Recently, Sens. Barbara Boxer (D-CA) and Rand Paul (R-KY) jumped on the corporate tax holiday bandwagon. Their proposal would offer companies a one-time tax rate of 6.5% on profits they've booked offshore for tax purposes, compared to our statutory 35% tax rate. That would provide a powerful incentive for companies to continue avoiding their taxes by booking profits to sham subsidiaries in a tax haven that are often nothing more than a P.O. box.</p>
<p>We've conditioned these multinational corporations to expect another "tax holiday" down the road - and why shouldn't they? A similar tax holiday was enacted back in 2004, <a href="http://uspirg.org/sites/pirg/files/reports/Picking%20Up%20the%20Tab%20vUS_web.pdf" target="_hplink">followed by executive pay increases and over 20,000 jobs shed</a>. Now we're just rewarding the most aggressive corporate tax dodgers for their patience, to the detriment of the American taxpayers.</p>
<p>These proposals have faced outcry from a number of tax fairness and civil society groups, but we aren't the only voices on the table. The president notably called out corporate tax avoidance in his annual State of the Union, and top Republicans such as Sen. Inhofe and Sen. Hatch have deemed using a tax holiday to fund infrastructure a "bad policy." Hatch explicitly said, "<a href="http://thehill.com/policy/transportation/231141-paul-boxer-team-up-for-invest-in-transportation-act" target="_hplink">Saying you're going to use something that loses money to pay for anything is just wrong</a>."</p>
<p>President Obama's recently released budget calls for a 14% mandatory tax on all profits companies have booked offshore for tax purposes (known as a "deemed repatriation", in contrast to a voluntary "repatriation tax holiday"). While it is a huge improvement over a temporary tax holiday because it forces companies to pay U.S. taxes they owe on U.S. profits they've booked offshore, it still rewards large multinationals with armies of tax lawyers. It thereby gives them a massive discount at the expense of responsible small business owners and ordinary taxpayers. A company's success should be based on the quality of their products or services, not on how many tax accountants they can hire or how well they can game the system.</p>
<p>Our country badly needs investments in infrastructure - <a href="http://www.infrastructurereportcard.org/bridges/" target="_hplink">one in nine bridges are considered "structurally deficient,"</a> and access to public transit must keep up with changing travel trends as <a href="http://www.uspirg.org/sites/pirg/files/reports/US_Transp_trans_scrn.pdf" target="_hplink">Americans drive less</a>. But a corporate tax holiday that would cost taxpayers money down the road is not the way to do it.</p>
<p>Instead of using a tax break gimmick to pay for infrastructure, Congress should close the loopholes. Fortunately, there is a strong proposal on the table to do that: The Stop Tax Haven Abuse Act (S. 174, H.R. 297), recently introduced by Sen. Sheldon Whitehouse (D-RI) and Rep. Lloyd Doggett (D-TX). This bill would close the most egregious corporate tax loopholes and curb corporate inversions, a <a href="http://www.huffingtonpost.com/jaimie-woo/recent-inversion-wave-bri_b_5861028.html" target="_hplink">tactic companies have used to further lower their tax bill</a>.</p>
<p>Let's let common sense lead the national debate on tax reform. It's time for us to recognize that letting corporations game our tax code forces the rest of us to foot the bill. Let's implement the solutions that work.</p>
<p>--</p>
<p>You can also view this blog on Huffington Post <a href="http://www.huffingtonpost.com/jaimie-woo/a-terrible-horrible-no-go_b_6760236.html">here</a>. </p>
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<a href="/topics/transportation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Transportation</a> </li>
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Thu, 26 Feb 2015 15:53:44 +0000jwoo38971 at http://www.uspirg.orghttp://www.uspirg.org/blogs/blog/usp/terrible-horrible-no-good-very-bad-idea#commentsComment letter to GASB about Tax Abatement Disclosureshttp://www.uspirg.org/resources/usp/comment-letter-gasb-about-tax-abatement-disclosures
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U.S. PIRG
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<span class="file"><img class="file-icon" alt="" title="application/pdf" src="/modules/file/icons/application-pdf.png" /> <a href="http://www.uspirg.org/sites/pirg/files/resources/GASB%20Comment%20Letter.pdf" type="application/pdf; length=1122982">GASB Comment Letter.pdf</a></span>
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Thu, 05 Feb 2015 19:59:55 +0000msurka@pirg.org38661 at http://www.uspirg.orghttp://www.uspirg.org/resources/usp/comment-letter-gasb-about-tax-abatement-disclosures#commentsU.S.PIRG advises for stronger standards to track state and local economic subsidieshttp://www.uspirg.org/news/usp/uspirg-advises-stronger-standards-track-state-and-local-economic-subsidies
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<span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2015-02-05T00:00:00-05:00">Thursday, February 5, 2015</span>
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<div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/usp/michelle-surka">Michelle Surka</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p class="MsoNormal">The Government Accounting Standards Board (GASB) called for public comment on proposed rules for reporting on tax abatements that could require states and localities to achieve new levels of checkbook level transparency around economic development programs. Across the U.S. these programs represent tens of billions of dollars in subsidies, often granted with little transparency or accountability for results. In our comment letter to GASB, US PIRG made a few suggestions for amendments that would further strengthen the proposed GASB standards.</p>
<p class="MsoNormal">Right now, there are no standards for reporting economic subsidies on the state or local level. As we’ve seen through our work on the annual <em>Following the Money</em> reports, state officials tell us they struggle to accurately and consistently report the numbers around these programs. From obstacles relating to intra-governmental communication to confusion about what should be best practice for reporting subsidy data, states need guidance around this kind of accounting. Officials need to know that if they take steps to show how much public money is dedicated to these subsidies, they will be able to resist criticism from special interests by pointing to generally accepted standards. The new proposed GASB rules are a great step, but US PIRG calls on the Board to hold states and localities to an even higher standard.</p>
<p class="MsoNormal"><a href="http://uspirg.org/sites/pirg/files/resources/GASB%20Comment%20Letter.pdf"><strong>Read the comment letter.</strong></a></p>
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<a href="/issues/usp/transparent-accountable-budgets">Transparent &amp; Accountable Budgets</a>
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US PIRG
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<p class="MsoNormal">The Government Accounting Standards Board (GASB) called for public comment on proposed rules for reporting on tax abatements that could require states and localities to achieve new levels of checkbook level transparency around economic development programs. Across the U.S. these programs represent tens of billions of dollars in subsidies, often granted with little transparency or accountability for results. In our comment letter to GASB, US PIRG made a few suggestions for amendments that would further strengthen the proposed GASB standards.</p>
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Thu, 05 Feb 2015 16:30:07 +0000msurka@pirg.org38641 at http://www.uspirg.orghttp://www.uspirg.org/news/usp/uspirg-advises-stronger-standards-track-state-and-local-economic-subsidies#commentsObama Budget Closes Tax Loopholes, Cuts Wasteful Spending, but Falls Short of Ending Offshore Tax Dodginghttp://www.uspirg.org/news/usp/obama-budget-closes-tax-loopholes-cuts-wasteful-spending-falls-short-ending-offshore-tax
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For Immediate Release
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<span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2015-02-02T00:00:00-05:00">Monday, February 2, 2015</span>
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<div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/usp/jaimie-woo">Jaimie Woo</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
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<p class="MsoNormal"><em>Statement of U.S. PIRG Tax and Budget Advocate Jaimie Woo on President Obama’s 2016 Budget Proposal.</em></p>
<p class="MsoNormal">"President Obama’s budget deserves praise for closing egregious offshore tax loopholes and preventing companies with enough lawyers from using tax havens to get their tax bill down to zero. Unfortunately it fails to end the incentive for wealthy multinationals to take advantage of tax havens, and would fall short of putting an end to offshore tax dodging.</p>
<p class="MsoNormal">"For years, some of America’s largest, most profitable companies have used accounting gimmicks to make profits made in America appear on the books in offshore tax havens, where they pay little to no tax. Tax haven abusers benefit from our educated workforce, infrastructure, and security and should not force the rest of us to foot their tax bill.</p>
<p class="MsoNormal">"The President’s plan rightly shuts the door on some of the most egregious loopholes companies use to game the system, especially by including provisions to curb inversions and earnings stripping. But while the door might be shut, it’s not locked. The President’s proposed 19 percent minimum tax rate on the foreign profits of American companies is a step in the right direction, but it nonetheless would reward companies that use accounting tricks to book profits to tax havens a big discount on the proposed statutory rate they’d otherwise pay.</p>
<p class="MsoNormal">"With this powerful incentive, companies will continue to search for other loopholes to exploit. The door to gimmicky tax dodging will only be locked when companies can’t get a tax discount for shifting their profits offshore, a principle that should also apply to the profits companies currently have booked offshore.</p>
<p class="MsoNormal">"When it comes to making critical investments while cutting out the waste, the President’s plan makes the right choices. We applaud the President for recognizing the need to bring transportation system into the 21st century by fixing roads and bridges and investing in rail and transit. </p>
<p class="MsoNormal">"We also applaud the President for calling on cuts to wasteful spending and special interest handouts. Deficit reduction shouldn’t be hard, and the budget plan goes after waste that would make average taxpayers shake their heads in disbelief. For example, the President proposes to nix billions worth of agricultural subsidies that mostly benefit agribusiness giants that don’t need taxpayer handouts."</p>
<p class="MsoNormal">Click <a href="http://www.uspirg.org/sites/pirg/files/reports/USP%20TowardCommonGround.pdf">here</a> for a joint report by U.S. PIRG and the National Taxpayers Union, two groups with widely divergent views on tax and spending policy that came together to offer half a trillion dollars worth of deficit reduction recommendations.</p>
<p class="MsoNormal">Click <a href="http://uspirg.org/reports/usp/picking-tab-2014">here</a> for a study done by U.S. PIRG and Citizens for Tax Justice identifying the most aggressive corporate tax avoiders.</p>
<p class="MsoNormal">Click <a href="http://uspirg.org/reports/usp/picking-tab-2014">here</a> for a U.S. PIRG study on how offshore tax dodging hurts the average taxpayer.</p>
<p class="MsoNormal" align="center"># # #</p>
<p class="MsoNormal"><a href="http://www.uspirg.org/"><em>U.S. PIRG</em></a><em>, the federation of state Public Interest Research Groups, is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society.</em> <em>If you wish to stop receiving U.S. PIRG media announcements, please reply to this email with "stop" in the subject line.</em></p>
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<a href="/topics/tax" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Tax</a> </div>
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<a href="/topics/transportation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Transportation</a> </div>
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<a href="/issues/usp/close-corporate-tax-loopholes">Close Corporate Tax Loopholes</a>
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U.S. PIRG
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<p class="MsoNormal">"President Obama’s budget deserves praise for closing egregious offshore tax loopholes and preventing companies with enough lawyers from using tax havens to get their tax bill down to zero. Unfortunately it fails to end the incentive for wealthy multinationals to take advantage of tax havens, and would fall short of putting an end to offshore tax dodging.</p>
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Tue, 03 Feb 2015 16:42:40 +0000jwoo38396 at http://www.uspirg.orghttp://www.uspirg.org/news/usp/obama-budget-closes-tax-loopholes-cuts-wasteful-spending-falls-short-ending-offshore-tax#commentsStatement on the President's State of the Union Addresshttp://www.uspirg.org/news/usp/statement-presidents-state-union-address
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For Immediate Release
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<span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2015-01-21T00:00:00-05:00">Wednesday, January 21, 2015</span>
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<div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/usp/mario-k-salazar">Mario K. Salazar</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p><strong>U.S. Public Interest Research Group Statement on the State of the Union Address</strong></p>
<p>The State of the Union address is the President's opportunity to articulate his priorities. In a time of divided government, action on many of the President's priorities will require an agreement with Congress. However, it is notable the range of issues raised by the President where he and his Administration can take action independent of Congress:</p>
<p><em>On Democracy</em></p>
<p>U.S. PIRG could not agree more with President Obama that our politics shouldn’t be drowning in dark money. Citizens have a right to know who is behind the slick campaign ads trying to influence their votes. The President should urge the SEC to require all corporations to disclose their political spending up front so that shareholders and citizens aren’t kept in the dark, and corporations can’t avoid accountability.</p>
<p><em>On Consumer Protections</em></p>
<p>U.S. PIRG supports the great work that the Consumer Financial Protection Bureau has done to protect consumers against predatory lending practices We will strongly oppose any efforts to weaken the CFPB or any other parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act. We applaud President Obama for renewing his vow to veto any attacks to this agency.</p>
<p>U.S. PIRG commends the President for backing the FCC’s existing authority to protect Net Neutrality. We will oppose any legislation aimed at hobbling or crippling FCC’s ability to protect the Internet from unfair practices, especially by its gatekeepers, the phone and cable oligopoly.</p>
<p><em>On Transportation</em></p>
<p>U.S. PIRG is working to ensure that transportation dollars are well spent for the future, including meeting the increasing demand for buses, trains, and infrastructure for walking and biking. We oppose the spending of federal tax dollars on highway expansion projects that are justified on unrealistic forecasts of future driving. We also oppose federal loans for public private partnerships that are financially risky because they are based on unrealistic forecasts of future toll revenue. While we agree with President Obama that infrastructural improvements are necessary, we think it is equally important that these dollars are well spent. President Obama’s Department of Transportation should ensure that the new reality of Americans driving less – which they recently acknowledged – is reflected in our transportation investments.</p>
<p><em>On Tax and the Budget</em></p>
<p>Corporate tax haven abuse costs the federal government $90 billion in lost tax revenue every year, forcing ordinary taxpayers to pick up the tab through cuts to public programs, higher taxes, or more borrowing. We applaud the Treasury Department’s guidance to crack down on corporate inversions, a tricky maneuver where a U.S. company changes its address on paper to a foreign country to avoid U.S. taxes. However, in addition to tackling several incentives to invert, we strongly urge the Treasury Department to issue a subsequent guidance to block earnings stripping, a strategy that allows companies to avoid U.S. tax by shifting profits made in the U.S. to tax havens.</p>
<p>Additionally, we strongly urge the Administration to reject any temporary corporate tax repatriation holiday — passing a tax holiday would reward the most aggressive tax dodgers by giving companies a massive tax discount on the profits they’ve booked offshore for tax purposes.</p>
<p><em>On Higher Education</em></p>
<p>U.S. PIRG shares President Obama’s sentiment that student loans are crippling our younger generation and that students should not have to go broke to pay for college. While it requires congressional action, U.S. PIRG applauds the President’s efforts to ensure two years of community college available for all those who are willing to work for it.</p>
<p>Please contact Mario Salazar, Legislative Director, with any questions (mario [AT] pirg [DOT] org or 202-546-9707, ext. 316).</p>
<p>-end-end-end</p>
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<a href="/topics/budget" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Budget</a>
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<a href="/issues/usp/consumer-protection">Consumer Protection</a>
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U.S. PIRG
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<p>The State of the Union address is the President's opportunity to articulate his priorities. In a time of divided government, action on many of the President's priorities will require an agreement with Congress. However, it is notable the range of issues raised by the President where he and his Administration can take action independent of Congress. We list our U.S. PIRG position on key highlights:</p>
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Wed, 21 Jan 2015 16:05:46 +0000edm38216 at http://www.uspirg.orghttp://www.uspirg.org/news/usp/statement-presidents-state-union-address#commentsNew year, fresh start: Congress’s Do’s and Don’tshttp://www.uspirg.org/blogs/blog/usp/new-year-fresh-start-congress%E2%80%99s-do%E2%80%99s-and-don%E2%80%99ts
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<a href="/blogs/usp/blog">Blog</a>
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<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden"><div class="field-items"><div class="field-item even"><span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2015-01-20T00:00:00-05:00">Tuesday, January 20, 2015</span></div></div></div><div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/usp/jaimie-woo">Jaimie Woo</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p class="MsoNormal">Another year has come and gone, and 2015 presents an opportunity to start fresh. With that in mind, it’s time for the newly minted 114th Congress to make the right choices for the public’s interest in its New Year’s resolutions, and making the tax code fairer is a good place to start.</p>
<p class="MsoNormal">“Tax reform.” Perhaps you hear these words and your eyes gloss over. It’s long been talked about, but hardly any progress made on the issue in nearly 30 years. However, both the president and Republican Congressional leaders have said they’re willing to make headway by reforming the corporate tax code. Here is a short list of Do’s and Don’ts that puts the public interest first and should form the basis of any agreement:</p>
<p class="MsoNormal"><strong>Do’s:</strong></p>
<p class="MsoNormal">- <strong>Close the loopholes that let wealthy multinational corporations get away with tax avoidance. </strong>Corporate tax haven abuse costs the federal government $90 billion in lost tax revenue every year. As a result, ordinary taxpayers have to pick up the tab through cuts to public priorities, higher taxes or more borrowing. In fact, to make up for that lost revenue, every small business in America would need to pay an additional $3,206 in federal taxes.</p>
<p class="MsoNormal">For example, take a loophole that tax lawyers have affectionately dubbed the “Double Irish” and the “Dutch Sandwich,” an egregious tax avoidance scheme used by Google and many other tech companies. For Google, this involves shifting profits to two Irish subsidiaries and one in Bermuda, a tax haven. Before going to Bermuda, the profits take a pit stop at a P.O. Box shell company in the Netherlands that has no employees. These gimmicks helped shrink Google’s tax bill by $3.1 billion from 2008 to 2010. Apple so deftly exploited similar loopholes that it was able to book $30 billion in profits to a phantom subsidiary that had no employees and was not considered a tax resident of any country in the world.</p>
<p class="MsoListParagraphCxSpMiddle">Loopholes allowing these types of tax avoidance schemes will likely be up for consideration, and in the worst-case scenario, could be made permanent. Congress must reject these proposals and finally close these <a href="http://www.huffingtonpost.com/jaimie-woo/its-not-over-yet_b_6034640.html">tax avoidance loopholes</a>.</p>
<p class="MsoListParagraphCxSpMiddle">- <strong>Pass meaningful legislation to stop corporate “inversions.” </strong>Over the past several months, well-known companies such as Burger King, Walgreens and Pfizer considered or followed through with the idea of changing the address of their corporate headquarters abroad on paper to avoid U.S. taxes -- a tax avoidance gimmick called an “inversion.” By buying out a smaller foreign company that is often based in a tax haven, companies that “invert” don't move abroad in any real sense, and continue to benefit from America's infrastructure, education system, security and large consumer market.</p>
<p class="MsoListParagraphCxSpLast">Last year, the Treasury Department issued a ruling that curbed some ways companies can invert, but it isn’t enough. The ball is in Congress’s court, and Congressional leaders have <a href="http://www.huffingtonpost.com/jaimie-woo/recent-inversion-wave-bri_b_5861028.html">proposed strong legislation</a> that should be passed, now. Unless meaningful legislation exists to restrict this practice, companies will continue to shift their tax burden to the public, whether through higher taxes, more debt, or cuts to essential public programs.</p>
<p class="MsoNormal"><strong>Don’ts: </strong></p>
<p class="MsoListParagraphCxSpFirst">- <strong>DO NOT adopt a “territorial” tax system, which incentivizes corporations to further shift profits abroad and avoid taxes on U.S. income. </strong>A “territorial” tax system is akin to a permanent “get out of taxes free” card. The U.S. already loses approximately $90 billion in federal tax revenues every year due to corporations booking their profits to offshore tax havens. These abusers benefit from our markets, infrastructure, workforce and security, but pay next to nothing for these benefits. Shifting to a territorial tax system would put small businesses and larger domestic companies at a competitive disadvantage.</p>
<p class="MsoListParagraphCxSpLast">Corporate lobbyists argue that, since other countries have adopted a territorial system, the U.S. should follow suit. A look at the UK should provide a cautionary tale. Despite rules intended to prevent tax haven abuse, Starbucks paid no corporate taxes in the UK from 2009 to 2012. Starbucks was able to shift profits abroad by paying premiums for coffee beans and roasting to offshore subsidiaries, and as a result were able to make it look like it was operating at a loss in the UK. Because the UK levies corporate tax on domestic profits, this income shifting eliminated Starbucks’ UK corporate tax bill. Other multinational companies, such as Amazon and Google, engage in similar practices.</p>
<p class="MsoListParagraph">- <strong>DO NOT pass a temporary corporate tax “repatriation” holiday. </strong>A tax holiday would reward the most aggressive tax dodgers by giving companies a <a href="http://www.huffingtonpost.com/jaimie-woo/infrastructure-bill-is-ac_b_3989024.html">massive tax discount</a> on the profits they’ve booked offshore for tax purposes. We’ve been down this road before and it wasn’t pretty. In 2011 a <a href="///C:\Users\Jaimie\Downloads\RepatriatingOffshoreFundsReportOct202011wExhibitsFINAL.pdf">Senate report</a> found that much of the profits some multinational corporations were supposedly holding offshore were actually sitting in U.S. bank accounts and other assets, undercutting the very premise that ‘bringing the money back’ would be a boon to the economy. Following 2004’s corporate tax holiday, many of the companies that touted these economic benefits used the extra cash to enrich shareholders or pay down corporate debt rather than to create jobs. The Senate also found that the 15 firms that repatriated the most money that year -- approximately $150 billion collectively -- actually shed nearly 21,000 jobs, while increasing executive pay and slightly decreasing investment in research and development.</p>
<p class="MsoNormal">The spotlight is on the Republican-controlled Congress -- and making these reforms a priority is a critical first step toward fixing our tax mess. The president has an opportunity to shed light on these issues tonight in his State of the Union address -- making the case for average Americans. While many special interests will try to hijack the congressional decision-making process, the public’s interest should rise above all others.</p>
<p class="MsoNormal">Check out this blog featured on Huffington Post: <a href="http://www.huffingtonpost.com/jaimie-woo/new-year-fresh-start-cong_b_6508420.html">http://www.huffingtonpost.com/jaimie-woo/new-year-fresh-start-cong_b_650...</a></p>
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Tue, 20 Jan 2015 16:49:02 +0000jwoo38206 at http://www.uspirg.orghttp://www.uspirg.org/blogs/blog/usp/new-year-fresh-start-congress%E2%80%99s-do%E2%80%99s-and-don%E2%80%99ts#commentsThe Country Has Spokenhttp://www.uspirg.org/blogs/blog/usp/country-has-spoken
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<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden"><div class="field-items"><div class="field-item even"><span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2014-12-08T00:00:00-05:00">Monday, December 8, 2014</span></div></div></div><div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/usp/jaimie-woo">Jaimie Woo</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p>While the dust is still settling from the mid-term elections and the pundits are trying to figure out what it all means, the American people have made their collective voices heard and delivered a message that they do not like the country's direction. <a href="http://www.americansfortaxfairness.org/files/2014-election-survey-by-Hart-Research-for-AFL-CIO-11-5-14.pdf" target="_hplink">Exit polling data</a> from Election Day showed clear majorities in against growing corporate influence on the political process and in favor of greater corporate accountability. The message is clear: inversions must stop, corporate tax avoidance must end, and special corporate loopholes must close.</p>
<p>The question that remains, of course, is whether Congress will hear that message. As the post-election lame duck session gets underway, Congress has an excellent opportunity to show that they've heard the American people loud and clear by acting on tax extenders. There are two extenders that exemplify the very worst of corporate tax avoidance and should be allowed to fade away.</p>
<p>The first is the Controlled Foreign Corporation (CFC) Look-Through rule. The CFC Look-Through rule allows multinationals to create "stateless income," moving income to low or no-tax countries and avoid U.S. tax in the process. They do this by setting up a network of subsidiaries, one of which own copyrights and patents used by the other foreign subsidiary. The fees paid from the one subsidiary to another create vast profits for these entities and avoid any tax anywhere. Google has heavily utilized the CFC Look-Through rule in its tax avoidance efforts.</p>
<p>The second is the Active Financing Exception. This is an exception to the rule that passive income (interest, dividends, royalties, etc.) is treated as taxable income even if it is not brought back to the United States. Instead, if the income is used for financial operation like financing the sale of jet engines, there is no U.S. tax so long as the profits from the deal stay offshore. However, what constitutes financial operations is so broadly defined as to enable virtually any multinational to take advantage of it. The Active Financing Exception explains why G.E., through its G.E. Capital subsidiary, has paid a <a href="http://www.ctj.org/corporatetaxdodgers/" target="_hplink">negative tax rate</a> on billions in profits over the last five years.</p>
<p>Public sentiment is overwhelmingly against these and other tax avoidance tricks that continue to benefit corporations that are already seeing record high profits. Those who doubt this need to look no further than Walgreen's, which halted a planned inversion of its own in the face of massive public outrage.</p>
<p>These policies hurt all of us. When multinational corporations are able to avoid taxes, it leaves individual citizens and domestic corporations picking up the tab in the form of higher taxes and more public debt. And it further places small businesses, which pay a higher tax rate with none of the loopholes, at a competitive disadvantage. The message to Congress is clear: it is time for corporations quit cashing out without chipping in.</p>
<p><em>Jaimie Woo</em> is the federal Tax and Budget Associate for U.S. PIRG, a member of the FACT Coalition.</p>
<p><em>Founded in 2011, the Financial Accountability and Corporate Transparency (FACT) Coalition unites civil society representatives from small business, labor, government watchdog, faith-based, human rights, anti-corruption, public-interest, and international development organizations. We seek an honest and fair corporate tax code, greater transparency in corporate ownership and operations, and commonsense policies to combat the facilitation of money laundering and other criminal activity by the legitimate financial system.</em></p>
<p>This blog was also featured on The Huffington Post: <a href="http://www.huffingtonpost.com/jaimie-woo/the-country-has-spoken_b_6288910.html">http://www.huffingtonpost.com/jaimie-woo/the-country-has-spoken_b_628891...</a></p>
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Mon, 08 Dec 2014 17:07:58 +0000jwoo37826 at http://www.uspirg.orghttp://www.uspirg.org/blogs/blog/usp/country-has-spoken#commentsU.S. PIRG Urges Treasury Department to Expand Ruling on Inversionshttp://www.uspirg.org/news/usp/us-pirg-urges-treasury-department-expand-ruling-inversions
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FOR IMMEDIATE RELEASE
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<span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2014-12-01T00:00:00-05:00">Monday, December 1, 2014</span>
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<div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/usp/jaimie-woo">Jaimie Woo</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p class="MsoNormal"><strong>Washington, D.C. –</strong> The U.S. Public Interest Research Group today submitted comments to a ruling issued by The Department of Treasury on corporate inversions. The <a href="http://www.treasury.gov/press-center/press-releases/Pages/jl2645.aspx">guidance</a>, released in September, laid out a number of reforms to curb inversions including regulations on “hopscotch” loans and “de-controlling” strategies.</p>
<p class="MsoNormal">The ruling has helped de-incentivize companies from inverting to avoid paying their U.S. taxes on their U.S. profit. AbbVie cited the Treasury guidance as a <a href="http://dealbook.nytimes.com/2014/10/20/abbvie-and-shire-agree-to-terminate-their-deal/?_php=true&amp;_type=blogs&amp;_r=0">primary reason for pulling out of its inversion deal</a> with Shire Inc.</p>
<p class="MsoNormal">U.S. PIRG submitted a comment urging The Treasury Department to expand on its ruling in a subsequent guidance with ways to block earnings stripping, a strategy that creates the tax benefit for corporations to invert in the first place. </p>
<p class="MsoNormal">Other recommendations include ending deferral so that American corporations must pay the U.S. taxes they owe on profits that have been booked offshore for tax purposes, and preventing the federal government from awarding contracts to American corporations that have changed the address of their headquarters to a foreign country for tax purposes. </p>
<p class="MsoNormal">The Treasury Department issued the ruling at a time when <a href="http://www.huffingtonpost.com/jaimie-woo/recent-inversion-wave-bri_b_5861028.html">high-profile inversions</a> were being considered, including deals involving Pfizer, Walgreens, and Burger King. </p>
<p class="MsoNormal">“Companies that “invert” don’t move abroad in any real sense. They only hold up their foreign papers when it comes time to pay the tax man, all the while continuing to benefit from America’s infrastructure, education system, security and large consumer market,” said <strong>Jaimie Woo</strong>, Tax and Budget Advocate for <strong>U.S. PIRG</strong>. “Average taxpayers, small businesses, and larger domestic companies end up footing the tax bill of inverted companies, which adds up to an <a href="http://democrats.waysandmeans.house.gov/press-release/house-democrats-introduce-legislation-tighten-restrictions-corporate-tax-inversions">estimated $17 billion over the next decade</a>.”</p>
<p class="MsoNormal">“While any ruling by The Treasury Department is a strong first step towards curbing inversions that allow corporations to avoid their tax bill, it’s up to Congress to close the loopholes once and for all,” added Woo.</p>
<p class="p1"># # #</p>
<p class="p2"><a href="http://www.uspirg.org/"><em>U.S. PIRG</em></a><em>, the federation of state Public Interest Research Groups, is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society.</em></p>
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<a href="/issues/usp/close-corporate-tax-loopholes">Close Corporate Tax Loopholes</a>
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<p class="MsoNormal"><strong>Washington, D.C. –</strong> The U.S. Public Interest Research Group today submitted comments to a ruling issued by The Department of Treasury on corporate inversions. The <a href="http://www.treasury.gov/press-center/press-releases/Pages/jl2645.aspx">guidance</a>, released in September, laid out a number of reforms to curb inversions including regulations on “hopscotch” loans and “de-controlling” strategies. </p>
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Mon, 01 Dec 2014 20:02:29 +0000jwoo37716 at http://www.uspirg.orghttp://www.uspirg.org/news/usp/us-pirg-urges-treasury-department-expand-ruling-inversions#commentsIt's Not Over Yethttp://www.uspirg.org/blogs/blog/usp/its-not-over-yet
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<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden"><div class="field-items"><div class="field-item even"><span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2014-10-23T00:00:00-04:00">Thursday, October 23, 2014</span></div></div></div><div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/usp/jaimie-woo">Jaimie Woo</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p>There are 12 days left before the 2014 election, and campaign efforts have hardly let up. Last-minute donations are flooding in, canvassers are knocking on doors, and organizations are registering young people to vote.</p>
<p>But after November 4, Congress will reconvene, and their work will be far from over.</p>
<p>Our representatives, whether they're re-elected or not, will return to Capitol Hill to deal with some important deadlines. They will need to pass a continuing resolution to ensure funding for the federal government, and they're also likely to renew a collection of 55 temporary tax breaks, known as "tax extenders," that are set to expire at the end of this year.</p>
<p>Extended for one or two years at a time, these tax breaks aim to stimulate our economy, encourage business investment, and provide research credits. However, due to a steady stream of corporate lobbying and campaign contributions, many tax extenders of questionable merit are passed without meaningful discussion or analysis of their success. Two tax extenders, in particular, incentivize companies to continue avoiding their taxes on U.S. profits by making it appear as if those profits are generated offshore. Adding insult to injury, this adds to the deficit -- <a href="http://uspirgedfund.org/sites/pirg/files/reports/OffshoreShellGamesUSPIRG-CTJ.pdf" target="_hplink">costing the federal government $90 billion every year</a> -- meaning their cost will be borne by taxpayers through future tax hikes or increased debt.</p>
<p>The Controlled Foreign Corporations (CFC) Look-Through Rule allows U.S. multinationals to create "stateless income" -- income that is treated, for tax purposes, as being earned in a low-tax (or no-tax) country. This could be in the Cayman Islands, where the company's operations may consist of only renting a mailbox, rather than in the countries where the employees and assets are actually located. It also makes it easier for companies to engage in "earnings stripping," another clever maneuver that permits them to book active income coming from high-tax countries into low-tax or no-tax countries without having to pay any U.S. taxes on U.S. profits.</p>
<p>A section of the tax code currently requires multinational corporations to treat passive income (such as interest, dividends, or royalties) as taxable income even if the income is not brought back to America. The Active Financing Exception is an exception to this general rule, created thanks to fierce corporate lobbying. Essentially, this rule allows multinational corporations to avoid tax on their worldwide income by making it look like their profit is generated in offshore subsidiaries, thereby manipulating their tax bill. It is a major reason why <a href="http://www.uspirg.org/news/usp/offshore-tax-havens-cost-average-taxpayer-1259-year-small-businesses-3923" target="_hplink">General Electric paid a federal effective tax rate of negative 11.1 percent</a> between 2008 and 2012.</p>
<p>There is rising public outrage against big corporations' manipulation of these kinds of loopholes - for example, the <a href="http://www.huffingtonpost.com/jaimie-woo/recent-inversion-wave-bri_b_5861028.html" target="_hplink">outcry against inversions</a>. Congress should take action to close loopholes and eliminate inversions, and let these two particularly egregious tax extenders expire immediately. When corporations like GE, Exxon, J.P. Morgan, and hundreds more use these methods to avoid their taxes, the public must pick up the tab in the form of higher taxes, more debt, or cuts to public programs. Meanwhile, small businesses that don't have offshore subsidiaries are categorically put at a competitive disadvantage.</p>
<p>Each individual Congressperson has a responsibility to act in the interest of the American people. In 12 days, they will have their opportunity. The CFC Look-Through Rule and the Active Financing Exception allow companies to thrive off of our American infrastructure, economy and education, and yet excuses them from paying their fair share in taxes. Wealthy corporations should not be able to cash out without chipping in, so let's not excuse them any longer.</p>
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Fri, 24 Oct 2014 17:14:57 +0000jwoo36861 at http://www.uspirg.orghttp://www.uspirg.org/blogs/blog/usp/its-not-over-yet#commentsRecent Inversion Wave Brings on Slew of Outrage - What's Next?http://www.uspirg.org/blogs/blog/usp/recent-inversion-wave-brings-slew-outrage-whats-next
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<div class="field field-name-field-shared-post-date field-type-datetime field-label-hidden"><div class="field-items"><div class="field-item even"><span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2014-09-19T00:00:00-04:00">Friday, September 19, 2014</span></div></div></div><div class="field field-name-field-author-bio field-type-node-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/staff/usp/jaimie-woo">Jaimie Woo</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden">
<p class="MsoNormal">Ten years ago, Republicans and Democrats agreed that corporate tax dodging was a problem, and came together to fix it. But large U.S. corporations got trickier — they sought out new ways to get around paying their taxes on U.S. profits, hiring thousands of tax accountants to take advantage of loopholes in our tax code. The recent fix? Corporate inversions. </p>
<p class="MsoNormal">Essentially, corporate inversion allows companies to make it look like their U.S. profits are generated abroad, when in fact they are not. By buying out a foreign company and using it as a tax haven, companies that “invert” don’t move abroad in any real sense, and continue to benefit from America’s infrastructure, education system, security and large consumer market. Average taxpayers, small businesses and larger domestic companies end up footing their tax bill. These offshore loopholes let companies avoid as much as $90 billion worth of taxes each year, according to a <a href="http://uspirgedfund.org/sites/pirg/files/reports/OffshoreShellGamesUSPIRG-CTJ.pdf">U.S. PIRG report</a>. That doesn’t seem right. </p>
<p class="MsoNormal">Today, Sens. Sherrod Brown and Dick Durbin introduced a bill that would dig at an aspect of corporate inversion. It requires companies to “pay what they owe” on the offshore cash that they are hiding the moment it inverts. A couple of weeks ago, Sens. Chuck Schumer and Dick Durbin introduced another bill getting at inversion incentives. The legislation comes on the heels of several American companies – including Burger King and Walgreens — considering moving the address of their headquarters to a foreign subsidiary in order to dramatically shrink their tax bill, using a loophole in the tax code known as “earnings stripping.” Companies use this clever accounting trick to essentially load the American part of the company with debt owed to the foreign part of the company, making interest payments tax-deductible and thereby reducing the appearance of American profits. </p>
<p class="MsoNormal">These bills aren’t the only proposals on the table. Sen. Carl Levin’s Stop Tax Haven Abuse Act, as well as the Stop Corporate Inversions Act and No Federal Contracts for Corporate Deserters Act, are other pieces of legislation on the table to tackle tax avoidance maneuvers. We’ve seen this time and time again — bills get introduced, potential cosponsors are prodded, and then nothing happens. So the question remains: What’s next?</p>
<p class="MsoNormal"> It’s time for things to be different.</p>
<p class="MsoNormal">Corporations are craftier at finding loopholes in our tax code, but things are changing and there have been some victories of late: Walgreen Co. took into account the deep backlash from its customers, and didn’t go through with their inversion deal. Rep. Rosa DeLauro was able to successfully attach an amendment to several appropriations bills that would prohibit any company that inverted in Bermuda or the Cayman Islands from engaging in federal contracts. Both Republicans and Democrats approved of this measure, acting upon their collaboration from 10 years ago, and perhaps paving the way for more bipartisan efforts. </p>
<p class="MsoNoSpacing">With the recent wave of corporate inversions, now is the time to strike while the iron is hot, and finally act on corporate tax avoidance. While some Members of Congress have shown tremendous support in the effort to curb inversions, we can’t forget the bigger picture: Inversions are just one of many loopholes that corporations use to avoid paying their taxes. These bills are all solutions to many pieces to the bigger problem, and must be considered together. Sens. Ron Wyden and Orrin Hatch, the chairman and ranking member of the Senate Finance Committee, respectively, should act on the numerous bills, as a collective, and hold corporations accountable to the taxes they should owe. </p>
<p class="MsoNoSpacing">Companies have gotten smarter at tax dodging. Let’s take action, and get ahead of the game. </p>
<p class="MsoNormal"> </p>
<p class="MsoNormal" align="center"># # #</p>
<p class="MsoNormal"><em>U.S. PIRG, the Federation of State Public Interest Research Groups, is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society. </em><a href="http://www.uspirg.org/"><em>www.uspirg.org</em></a></p>
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Fri, 19 Sep 2014 19:04:54 +0000jwoo35881 at http://www.uspirg.orghttp://www.uspirg.org/blogs/blog/usp/recent-inversion-wave-brings-slew-outrage-whats-next#comments